Question

In its first month of operations, Windsor, Inc. made three purchases of merchandise in the following sequence: (1) 400 units at $5, (2) 500 units at $7, and (3) 600 units at $8. Assuming there are 300 units on hand at the end of the period, compute the cost of the ending inventory under (a) the FIFO method and (b) the LIFO method. Windsor, Inc. uses a periodic inventory system.

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Windsor, Inc. made three purchases of merchandise in the following sequence:

(1) 400 units at $5,

(2) 500 units at $7

(3) 600 units at $8.

Total units= 1,500

Assuming there are 300 units on hand at the end of the period, compute the cost of the ending inventory.

A) FIFO (first-in, first-out)

Inventory= 300*8= $2,400

B)LIFO (last-in, first-out)

Inventory= 300*5= $1,500